Over at the WSJ Opinion Journal, John Zogby writes that the emerging “investor class,” i.e., people with significant investments and investment income, is large — 46% of the population and growing. Zogby thinks this portends well for the Republican party because investors tend to vote Republican. I think Zogby is probably correct.
One neglected facet of the Social Security debate is how changing Social Security from a non-saving welfare program to a saving investment program will alter the relationship of the individual citizen to the State. Under the current system, an individual’s right to Social Security and his rate of return are wholly dependent upon political fiat. An individual gets only what the political class say he will get and only when they say he will get it. The individual becomes very dependent on the whims of the political elite.
How many elderly people have voted for socially liberal Democrats, not because they support the full set of the Democrats’ political agenda but only because they fear losing their Social Security benefits? How many deeply religious people must choose to vote for politicians who support abortion on demand, in order to get their retirement checks?
For the political class, creating dependence on the State is the first and best means of job security. I think that what opponents of privatization really fear is not that it will fail, but that it will succeed and thereby obviate the need for a political class to provide retirement security. If most people no longer have to kowtow to politicians in order to have a secure retirement, a wide swath of the political spectrum will lose a major justification for its existence. Individuals will be far more free to vote their consciences without fearing economic harm.
Throughout history, political classes have used fear to control the people. The current fear mongering over Social Security springs from the same totalitarian impulse as motivated those who rattled sabers in the past. It is time to move beyond fear and create programs that let individuals be financially secure but politically independent.